World’s First Internet Tax? No Thanks – 100,000 Hungarians Are Revolting

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Oct 29 2014
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The Government of Hungary was trying to do something unthinkable to its netizens. And it could be the first implementation in the world and the World Wide Web. But it was so outrages that almost every government doesn’t agree with it. As a result, tens of thousands of Hungarians (Reuters put the figures at 100,000) took to the street against a new type of tax – Internet Tax.

Hungary Internet Tax Protest - Tens of Thousands

The protesters rallied in front of the Economy Ministry in Budapest on Sunday, October 26, and again on Tuesday, October 28. It’s not hard to understand why tens of thousands of Hungarians were frustrated with the jaw dropping new tax. Prime Minister Victor Orban’s plan that will see internet service providers (ISPs) pay 150 forints (US$0.62; £0.38; RM2) for every gigabyte of data traffic transferred over their networks was simply outrages.

Hungary Internet Tax Protest - Prime Minister Victor Orban

Although the draft suggests that ISPs would be able to offset corporate income tax against the new “Internet Tax”, to be implemented in 2015, protesters believe that eventually ISPs would pass the tax burden back to consumers. Orban’s governing party, Fidesz, won its second consecutive two-thirds majority in April and he is starting his third four-year term. But the victory makes Orban administration increasingly arrogant and autocratic.


In fact, Orban’s government has been looking at every corner to impose new taxes. In 2012 it imposes new levies on the telecommunications sector, dominated by foreign companies, where operators pay taxes for every minute of voice connections made and every text sent, with a monthly per-user cap. If that was not enough to anger the people, Hungary’s tax on goods and services is at 27%, the highest rate in the European Union.

Hungary Internet Tax Protest - Protester Sit on Traffic Light

Conflicts started from 2010 with the European Union and criticism from the United States and others on new laws regulating everything from the media to churches. This include special taxes on the banking, retail, energy and telecommunications sectors to keep the budget deficit in check. Orban administration was also criticised for intimidating independent civic groups, including corruption watchdogs and minority advocates.

Hungary Internet Tax Protest - Anonymous with Keyboard

The proposed new tax got so absurd that the European Union yesterday denounced Hungary’s plan for an Internet tax as a new threat to political freedom in the country and also for broader EU economic growth. Due to tremendous pressures from every angle, Victor Orban made a U-turn with a new bill that capped the tax at 700 forints (US$2.90; £1.80; RM9.50) per month for individuals and 5,000 forints (US$20.60; £12.80; RM67.45) for companies.


Despite the softening, tens of thousands showed their displeasure and walked and assembled at the Heroes Square, thanks to a Facebook group called “100,000 against the Internet tax” (which has over 230,000 supporters as of now). Orban administration claims the tax would make up for revenue lost due to the widespread use of the Internet and its free-of-charge communication that substitutes more traditional voice connections.

Hungary Internet Tax Protest - Protesters Flashing Smartphone

However, Hungarians believe the real reason was to restrict their freedom, so that the government’s mismanagement of the economy and corruption can be swept under the carpet. There’s also a hidden reason why Orban  government, accused of adopting anti-democratic, anti-NATO and anti-European Union policies, behaves in such a way. Prime Minister Victor Orban was seen to be getting too close towards Russia. For now, they vowed to continue the rallies until the government withdraws the tax plan – completely.


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